John Roberts
SugarCRM
www.sugarcrm.com
In 1999, Salesforce.com turned the customer relationship management software industry on its ear by offering a new kind of software to manage a company's sales people. It had all the basic functionality of a multimillion dollar product offered by Siebel or SAP, but with a low, monthly-pay-as-you-go fee.
SugarCRM wants to do it again. The open-source company makes similar software, which can also be delivered over the Internet. Only it's not just cheap -- it's free. And it has taken off fast.
The three founders -- John Roberts, Clint Oram, and Jacob Taylor -- quit jobs at customer relationship management software also-ran Epiphany, now part of SSA Global, in April, 2004, and had a product and $2 million in funding within four months. In little more than a year, SugarCRM has rocketed to 325,000 downloads.
SugarCRM has about 500 customers that pay for a souped-up version of the software, as well as maintenance and support -- a big step down from the volume of free downloads. Still, few new startups can get a product out the door and start generating revenue so fast with such little cash.
SugarCRM's chief executive Roberts credits the open-source model. While most software companies, including scrappy Salesforce.com, spend millions on marketing, sales, and promotions, SugarCRM plows almost all of its money into software development and providing service for paying customers.
Despite a base of 900 contributing open-source developers who fix bugs and have translated the program into some 20 different languages, Sugar still does most of the heavy lifting. But the Web does the rest.
"This is software that is bought, not sold," the chief executive Roberts says. "We don't spend a lot of time selling or taking people out to dinner. People know they are buying a solution where 70 cents of every $1 is going to development of the software, not marketing."